Renewable energy, electric vehicles and green hydrogen all offer ways to reduce our dependence on fossil fuels. Recent years have seen rising interest in how these technologies impact the demand and mining of critical materials. Lithium mining for electric batteries, in particular, has been scrutinised by environmental groups. Yet less discussed is green hydrogen which requires scarce materials, writes Rebecca Bertram.
Its proponents tout green hydrogen as the gold of the twenty-first century, while policy makers are clearing the way for a massive global build-up and trade. Promises and stakes are high: green hydrogen offers a way to decarbonise so-called hard-to-abate sectors, such as steel, cement and chemical industries, for which there currently are no other viable climate-friendly alternatives. According to the United Nations, some 70 countries have to date set net zero targets covering 76 percent of global emissions. Should green hydrogen suddenly not be as sustainable as it claims, this would have a catastrophic impact on the industrial decarbonisation necessary to avert dangerous climate change.
There are different ways to produce hydrogen. Green hydrogen is produced by splitting water into hydrogen and oxygen using renewable electricity. The machines that produce the hydrogen from water and electricity are called electrolysers, and there are four main types of electrolysers on the market today, all requiring certain amounts of raw materials, yet to different degrees.
Alkaline electrolysers have been around for more than a century and usually do not go well with intermittent renewable energies as they are slow to ramp up and down. Polymer electrolyte membrane (PEM) electrolysers have taken on a growing market share in recent years due to their good flexibility with renewable energy. Anion Exchange Membrane (AEM) electrolysers are good with intermittent renewable energy but are not yet available in large quantities, and Solid Oxyde Electrolyser Cell (SOEC) are another option but are still at a very low technological readiness level. According to the IEA Hydrogen Review 2022, project developers currently tend to favor PEM electrolysers over any other electrolyser type. This is problematic because they require large amounts of platinum group (PGM) metals.
PGM metals are a group of six similar elements that are very common in a wide range of medical, industrial and electronic applications and play a significant role in many products that we use in our everyday lives, such as auto catalysts, computer hard disks, mobile phones aircraft engines and glass for example. PEM electrolysers need platinum and iridium, two of the scarcest and most emission-intensives materials in the world. And moreover, the International Renewable Energy Agency (IRENA) sees current global PGM supplies allowing for an annual PEM electrolyser manufacturing capacity of merely 3-7.5GW. This falls way short of the IEA minimum total installed electrolyser capacity estimation for 2030 of 134GW.
Platinum and iridium are highly concentrated in just a handful of countries, with South Africa being a major supplier for both. The country provides up to 85 percent of global iridium and more than 70 percent of global platinum supplies. Markets for both metals are inelastic, meaning that a relatively small change in supply and demand can result in large price fluctuations, and iridium prices have increased by a factor of 70 over the past twenty years. If PEM electrolysers are to become the backbone of the green hydrogen revolution, we can expect prices to skyrocket.
South Africa is a key geopolitical player in the global PGM market. Yet significantly increasing its PGM mining remains a pipe dream. The sector is faced with significant socio-economic challenges. First, the sector is highly labour-intensive and has been plagued by regular labour disputes and strikes for years. And although PGM mining contributes significantly to the South African economy, the benefits are very unevenly spread, with many local communities suffering from severe environmental degradation directly affecting their public health.
Little public debate is taking place on the new resource dependencies of electrolysers. Instead of engaging in an honest debate about its limits, policy makers are pushing and increasing their own climate targets without asking themselves if they are in fact realistic. There is enough evidence showing that the current preferred PEM electrolyser option is not a sustainable one, and therefore policy makers need to set incentives and push for greater R&D and procurement rules of electrolyser technologies that do not have the same material constraints as PEM systems. AEM electrolysers could be such example, yet its development is still in its infancy and costs still exceed those of PEM systems. By setting clear financial incentives for alternatives to PEM electrolysers, policy makers and project developers will avoid the headache of having to deal with exploding prices and depletion of required materials. It is only then that the green hydrogen revolution can really take off!